Bhavika Pala Vs C.C. Ahmedabad (CESTAT Ahmedabad)
The CESTAT Ahmedabad (Customs, Excise and Service Tax Appellate Tribunal) in the case of Bhavika Pala Vs C.C. Ahmedabad has ruled that it possesses the jurisdiction to hear appeals concerning the seizure of foreign currency, distinguishing currency from “baggage.” This was established by overruling an initial objection, citing the Tribunal’s Principal Bench decision in Pawan Munjal vs Commissioner of Customs, New Delhi (2024), which held that the term “currency” in the Baggage Rules and the definition of “goods” in the Customs Act, 1962, excludes foreign currency, thus confirming CESTAT’s jurisdiction.
The central issue in this appeal was the seizure of foreign currency from a family traveling internationally, where the quantity allegedly exceeded permissible limits. The appellant’s counsel contended that the seized currency belonged to more than one family member and should be assessed accordingly, even if carried by one or two persons.
The Tribunal took note of the judicial precedent set by the Madras High Court in Rayavarapu Sri Devi Vs. Principal Commissioner of Customs (Adjudication-Air), Chennai (2025). In that case, concerning the attempted export of foreign currency, the High Court directed that the currency should be released upon payment of a reduced penalty and redemption fine, as currency is a restricted item, not a prohibited one.
Following this precedent, CESTAT ordered that the seized foreign currency is releasable upon the imposition of a redemption fine. The matter was remanded to the adjudicating authority with directions to reconsider the redemption fine, specifically factoring in the profit margin, which, in the case of currency, is limited to the commission charged by authorized dealers. Crucially, the Tribunal also directed a corresponding reduction in the penalties imposed on the family members, instructing the authority to consider the actual involvement, if any, of other family members in the alleged illegal export attempt.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
Initial objection raised about the jurisdiction of this Tribunal to decide the matter pertaining to seizure of foreign currency of air pox was overruled by this Court in view of the decision of the Principal Bench of this Tribunal in the matter of Pawan Munjal vs Commissioner of Customs, New Delhi reported in 2024 (20) Centax 318 (Tri-Del.). In which it was decided that term “currency” used in Baggage Rules read with definition of „goods‟ in Customs Act, 1962 excludes „foreign currency‟ also as it is not part of the baggage and therefore this Tribunal has jurisdiction. The matter is therefore proceeded with.
2. Learned Advocate submits that even if the currency was excess in limits. The learned original authority failed to consider that same belonged to more than one person and therefore had to be considered appropriately in quantum, even if it was it was carried out by one or two persons of the family. He seeks to rely on the decision in the case of Rayavarapu Sri Devi Vs. Principal Commissioner of Customs (Adjudication-Air), Chennai reported in 2025 (392) ELT 72 (Mad.) wherein the Hon‟ble High Court in case of export of foreign currency being attempted had directed that the same should be allowed to be released rather than absolutely confiscated on reduced penalty and on being given option of redemption fine as currency was not prohibited, but only restricted for the passenger.
3. Learned AR reiterates the findings and justifies the penalty imposed for the act of violations committed by the foreign going pox.
4. In the factual matrix and also decision of the Hon‟ble Madras High Court (cited supra) by the Learned AR. It is clear that the currency is releasable on imposition of redemption fine. While considering the Redemption fine, the profit if any as could have been made, needs to be considered by the adjudicating authority. It goes without saying that in case of currency such margin cannot be more than the commission etc. charged by the authorized dealers. Further, the penalty has to be correspondingly reduced for other passengers also. It shall also be factored in while considering reduction of penalty, as to what is involvement, if any of other family members in the whole act of alleged attempted illegal export.
5. Matter is remanded in above terms. Appeal is disposed of.
Dictated & Pronounced in the open court
